Project management software belongs on Line 18, office expense.
Why line 18
A task and project tool is overhead for running the work, so a subscription to it is office expense on line 18. That it is used on billable client projects does not move it: what it buys is the ability to run your operation, not an input to any one deliverable. If you rebill a seat to a client at cost, report the rebill in gross receipts and leave the cost on line 18.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so project management software lands on Line 18 without you sorting it.
Start for freeWhat project management software is confused with
- Line 27a, other expenses
- A tool so specific to one trade that office expense misdescribes it, a construction takeoff platform for instance, is fine itemised in Part V and carried to line 27a.
- Line 11, contract labor
- Paying a contractor who brings and bills their own tooling is contract labor on line 11, not a software cost of yours.
Examples that belong on line 18
- $10.99 a user a month for Asana Starter
- $12 a user a month for monday.com Basic
- $5 a user a month for Trello Standard
- $1,200 a year for a Jira plan covering four seats
What does not belong here
- Seats you buy and resell to a client at a markup without reporting the receipt.
- A one off implementation consultant's fee, which is a service cost.
- Seats bought for a hobby project that is not carried on for profit.
What to keep
Keep the subscription invoices showing seat counts. The invoices themselves explain why the annual total moved if seats grew mid year.
Other expenses on line 18
| Expense | Line |
|---|---|
| a desk lamp | Schedule C, Line 18 |
| a mixed order of supplies and groceries | Schedule C, Line 18 |
| a paper shredder | Schedule C, Line 18 |
| a password manager subscription | Schedule C, Line 18 |
| a PO box rental | Schedule C, Line 18 |
| a software subscription | Schedule C, Line 18 |
| a virtual mailbox | Schedule C, Line 18 |
| a work app subscription | Schedule C, Line 18 |
| accounting software | Schedule C, Line 18 |
| cloud storage | Schedule C, Line 18 |
| office coffee | Schedule C, Line 18 |
| office stationery | Schedule C, Line 18 |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so project management software lands on Line 18 without you sorting it.
Start for free